Aegon reports fourth quarter 2022 results
4Q 2022 Results | AEX:AGN | NYSE:AEG
- Previously announced impairment loss from classifying Aegon the Netherlands as held for sale following the transaction with a.s.r. leads to net loss of EUR 2.4 billion for 4Q22 and EUR 2.5 billion for the full year
- Operating result of EUR 488 million, a 4% increase compared with 4Q21. Benefits from expense savings, growth initiatives, an improvement in claims experience, and strengthening of the US dollar are partly offset by lower fees due to adverse markets and outflows. Full year 2022 operating result of EUR 1.9 billion, stable compared with the previous year
- The capital ratios of all three main units remain above their respective operating levels. Group Solvency II ratio amounts to 208%
- Cash Capital at Holding increases from EUR 1.4 billion to EUR 1.6 billion, mainly from EUR 318 million of free cash flow in 4Q22. Full year free cash flow increases from EUR 729 million in 2021 to EUR 780 million in 2022
- Proposed final 2022 dividend of EUR 0.12 per common share to be paid in cash, which brings the full year dividend to EUR 0.23 per common share
- Announcing new EUR 200 million share buyback to be executed in 1H23, barring unforeseen circumstances
Statement of Lard Friese, CEO
“The fourth quarter closes out a year in which we accelerated our transformation and the execution of our strategy. During the quarter, we announced the transaction to combine our Dutch businesses with a.s.r., a historic milestone for the company. Throughout the year we also made significant progress in improving our operating performance, and in further strengthening our balance sheet despite challenging market circumstances.
Our net result for the fourth quarter reflects the previously announced impairment loss as a result of classifying Aegon the Netherlands as held for sale. The operating result increased by 4%, as improved claims experience, the benefit from our operational improvement program and strengthening of the US dollar more than offset adverse market conditions. The operational improvement program contributed EUR 627 million to our operating result over the course of 2022, exceeding our EUR 550 million target one year earlier than expected. Given the overall success of the program, and in light of upcoming changes due to the transaction with a.s.r., we have decided to close out the reporting on the operational improvement program. We will provide an update to our strategy, including plans to further improve the efficiency of our operations and to accelerate commercial momentum at our Capital Markets Day in June 2023.
This year’s commercial results underscore the importance of offering customers a broad range of products. As a result of the uncertain macroeconomic environment, we saw outflows in Asset Management and in the UK Retail channel. In Workplace Solutions in the US we experienced net outflows as a consequence of the departure of one large customer. At the same time, life insurance sales grew in our growth markets and in the US, where Individual Solutions achieved the highest level of quarterly new life sales in the last five years. During 2022, the Workplace channel in the UK recorded the highest level of net deposits in the past four years, demonstrating the improvements we are making to our UK franchise. In the fourth quarter, we introduced the first phase of More Ways to Save in the UK, a new savings proposition with enhanced online services. In the US, Transamerica launched a new indexed universal life product specifically designed for the brokerage channel, complementing our current product that is successfully marketed by World Financial Group’s more than 62,000 agents. Supported by the commitment of our employees across the company, we will continue to introduce new products, improve the digital experience for our customers, and further build on our distribution strengths.
As a result of the progress we have made, both strategically and financially, we will propose a final dividend for 2022 of 12 eurocents per common share at our Annual General Meeting, bringing the full year dividend to 23 eurocents per common share. Furthermore, we are announcing a new EUR 200 million share buyback program for the first half of 2023, which underscores our disciplined capital management and commitment to returning surplus capital to our shareholders.
Looking ahead, we remain fully focused on executing our strategy and meeting our financial objectives. The actions we have taken so far provide us with confidence that we can deliver at least EUR 1.0 billion operating capital generation from our units outside of the Netherlands in 2023, barring unforeseen circumstances. We have generated EUR 1.5 billion of free cash flow during the past two years, achieving the three year target we set at the 2020 Capital Markets Day. For 2023, we aim to deliver around EUR 600 million free cash flow and are targeting an increase in our dividend to around 30 eurocents per common share, a reflection of our confidence in our strategy for the group.”